'Super Committee' Likely to Look to Medicare for Cuts

WASHINGTON -- The 12-member bipartisan Joint Select Committee on Deficit Reduction, dubbed the "super committee," is tasked with cutting an additional $1.2 trillion to $1.5 trillion from government spending and health groups and analysts say healthcare programs are a prime target.

The committee was mandated by the debt deal passed in early August and it has until Nov. 23 to agree -- by a simple majority -- on how to reduce the nation's deficit. Then Congress must vote on the package by Dec. 23. If the panel can't come to an agreement, if Congress rejects the plan, or if President Obama vetoes the plan, a "trigger option" will kick in, making automatic cuts of $1.2 trillion.

The committee members, which were announced this week by congressional leaders, are mostly seasoned lawmakers who have extensive knowledge of taxes, healthcare, and politics. The roster:

Sen. Patty Murray of Washington, chairwoman of the Democratic Senatorial Campaign Committee, who will co-chair the super committee

Sen. John Kerry of Massachusetts, a veteran member of Congress and former presidential candidate

Rep. James Clyburn of South Carolina, the third-ranking House Democrat

Rep. Xavier Becerra of California, who voted against the deal to raise the debt ceiling because "it is not balanced nor does it ask for shared sacrifice."

Rep. Chris Van Hollen of Maryland, who played a key role in the debt limit negations that averted the debt crisis

On the GOP side:

Sen. Jon Kyl of Arizona, the second-ranking Republican in the Senate

Sen. Rob Portman of Ohio, a freshman senator who was President George W. Bush's budget director for a year

Sen. Pat Toomey of Pennsylvania, who is staunchly opposed to new taxes, and also voted against the deal to raise the debt ceiling, because it "does not contain meaningful spending cuts."

Rep. Dave Camp of Michigan, who chairs the Ways and Means Committee, which has jurisdiction over taxes and Medicare.

Rep. Fred Upton of Michigan, who chairs the Energy and Commerce Committee, which oversees healthcare issues

Rep. Jeb Hensarling of Texas, who will serve as co-chairman along with Murray.

"They appear to be very experienced legislators, including those with important committees with jurisdiction over Medicare," David Lipschutz, a policy attorney at the nonpartisan Center for Medicare Advocacy, told MedPage Today. "What that means as far as what will come out of the committee is anyone's guess."

The most high-profile health-related name on the committee is Baucus, who was one of the leaders in making the ACA become law. Given his key role in the legislation, he's going to want to protect the law from "delay or evisceration," Ron Pollack, president of Families USA, predicted in an interview with MedPage Today. Families USA is a liberal healthcare advocacy group that strongly backs the ACA.

"Cutbacks in healthcare that will undermine the ACA will be something he'll very much oppose," said Pollack.

The other two members who chair health-related committees -- Republicans Fred Upton and Dave Camp -- both voted against the ACA and in favor of Rep. Paul Ryan's plan, which would drastically cut Medicare.

"The only hints one can get at this juncture is based on their voting record, and that from my point of view doesn't leave me with any sense of optimism whether these programs will be protected," Pollack said.

In a statement on his website, Camp said that curbing "overspending" in Washington will be key to creating more jobs and restoring confidence in the U.S. financial system.

Upton, meanwhile, issued a press release in which he called for "meaningful spending controls and program reforms that will continue the process of putting our fiscal house in order over the long term."

Talks to Focus on Entitlement Programs

Once the super committee gets down to business, talks on spending will likely focus largely on Medicare, and to a lesser extent, Medicaid.

"Looking at the rhetoric that's been thrown out, entitlement reform seems to be at the forefront of everyone's mind," said Lipschutz.

Lipschutz dismissed both those ideas and said raising the Medicare age wouldn't save much money. He would instead like the super committee to consider two other ways to trim Medicare costs: having the government negotiate medication prices directly with drug companies, and including drug benefits as part of traditional Medicare instead of a stand-alone Part D plan.

"We hope the committee would, if they're going to look at a Medicare proposals, look more broadly and not just at the things that have been proposed lately," Lipschutz said.

Medicaid will also be eyed by the panel as a place to make cuts, Josh Gordon, policy director of the Concord Group, a nonpartisan budget watchdog organization, told MedPage Today.

The program is set to take in an estimated 23 million new people in 2014 who have incomes at below 133% of the poverty level.

But Gordon said with Medicaid's already-low reimbursements to providers, "it's not clear how much lower Medicaid can go and still have a functioning system."

Medicaid cuts would be off the table, however, if the committee doesn't come to an agreement and lets the trigger option kick in.

Gordon puts his money on that scenario, pointing to the close alignment the committee members have with the leaders of their respective political parties. That means members will likely not deviate from the party line, and the final vote on any proposal will probably be split 6-6, Gordon predicted.

"I think basically you have a situation where Republicans have found it difficult to agree to any new revenue of any kind, and you have a commitment from Democrats to not cut entitlement programs unless there are new revenues to balance it out," Gordon said.

He said he doubts the trigger option is "scary enough" to get conservatives to agree to new taxes or to get liberals to agree to cutting entitlement programs.

"The trigger is likely to happen," he said.

What Will Happen with the SGR?

If the trigger option goes into affect, doctors and hospitals that treat Medicare patients would see a 2% across-the-board cut. That cut would be particularly unpopular with providers if the 30% scheduled reduction in physician payment goes into effect come Jan. 1 under the sustainable growth rate (SGR) formula.

Whatever happens, the timing of when Congress needs to pass a debt agreement bill (by Dec. 23) and when Congress needs to act on the SGR before the cuts take effect (Dec. 31) are just a week apart, making it all but certain it will be a more-tense-than-usual holiday season for physicians.

The American Osteopathic Association (AOA) sent a letter on Wednesday to the super committee chairs urging them consider the SGR in their deficit reduction talks.

"It is our opinion that any meaningful proposal aimed at addressing the financial stability of the Medicare program must address this issue in a meaningful and long-term manner," the group wrote. "Any proposal that fails to address the over $300 billion 'debt' associated with the SGR is a continuation of 12 years of policies that have contributed to our current situation."

The American Medical Association (AMA), which has been the most vocal supporters of reforming the SGR, also said it wants the debt committee to repeal the flawed formula.

"The fiscally responsible action for the Congressional debt committee is to repeal the Medicare physician payment formula," said AMA President Peter Carmel, MD, in a statement. "The AMA will engage patients, physicians and the public to communicate to Congress that the time to fix this problem is now."

Carmel added that the recommendations from the Simpson-Bowles Commission laid out a plan to eliminate the SGR by 2015 and pay doctors slightly less than current rates, while reducing the deficit by $4 trillion.

Accessibility Statement

At MedPage Today, we are committed to ensuring that individuals with disabilities can access all of the content offered by MedPage Today through our website and other properties. If you are having trouble accessing www.medpagetoday.com, MedPageToday's mobile apps, please email legal@ziffdavis.com for assistance. Please put "ADA Inquiry" in the subject line of your email.